What is the opportunity cost of a checking account that requires a $500 minimum balance to avoid service charges? Assume an interest rate of 4%.
If you earn a 9% return on your savings and are in the 28% tax bracket, what is your after-tax savings rate?
Using the following information, what is the cost to buy a car?
• Down payment $2000
• Monthly loan payment ($300 per month for a 5-year loan)
• Opportunity cost of down payment ($2000 ´ loan period (in years) ´ 2% interest)
• Estimated value of vehicle at end of ownership period ($2,000)